Payday lenders: helping victims get their lives back
The government has today announced a major crackdown on payday lenders. These are the companies that charge up to 4,000 per cent APRs to people that borrow a few hundred pounds for a few days.
While the payday loan industry bleats about the fact that is is responsible and that many of its borrowers can afford the loans and know what they’re doing, there’s growing evidence that they target vulnerable people.
I’ve seen evidence of ads targeting students and even the unemployed. Just this morning on Twitter I was contacted by someone who reported that her sister, who has an obvious learning disability and had never borrowed before, has ended up in debt to The Money Shop. I devoted my column in the Saturday Your Money section a couple of weeks ago to a company that targets late-night drunken revellers.
That brings me on to Graham Brewis, pictured right. He’s someone who’s been at the bottom because of drink and money problems, and climbed back up.
Now he runs an organisation in the north-east – Clean Slate – that helps others like him that have fallen into financial difficulties and into the clutches of unscrupulous lenders because of their addictions. But, like many other similar crucial outfits across the country, the service is struggling because of lack of funding. His story demonstrates that it’s not enough to crack down on the lenders, we desperately need to fund more support for vulnerable people who end up in dire financial straits.
Here’s his story.
“My early career showed great promise becoming Assistant Branch Manager at Northern Rock Building Society (now no longer of course) before moving onto IBM working both in Newcastle and Glasgow. However my social drinking started to show signs of dependency.
“It began to follow a pattern that I now witness in my current work at Clean Slate – poor attendance and performance at work, financial problems, health issues and relationship difficulties that were to lead to divorce and the house we were trying to rent out was repossessed.”
Graham began to recognise that he had a problem and so entered a detox programme in Newcastle where he met a woman battling heroin addiction. Their relationship grew and they moved into together and had a daughter and then later a son. But their relationship became full of recriminations, and Graham end up homeless, desperate and drunk.
His son was born prematurely with severe problems after he had left. “So I hadn’t even seen him when I received a phone call six weeks after his birth that the boy’s mother had been found dead after a suspected accidental overdose.”
Year’s of battling authorities to retain relationships with his children, now both in foster care, followed. “You would think that would have given me the impetus to make alcohol a thing of the past but it had a strong hold on me. Alcoholics are very adept at hiding their drink problems and can often function pretty well at work, but it is unlikely that they will fool everyone. Such was the case with me, coping at work but under-performing to my full potential.
“However during that period I established a tenancy in my name and sustained it. I didn’t realise at the time but this was part of my early recovery. A roof over my head, and somewhere to call ‘home’.
On Valentine’s Day 2000 Graham’s son passed away. “This was a decisive time for me to stop drinking and apart from one major relapse in 2004 that was it. Since September 14 that year not so much as a wine gum has passed my lips.” Graham was helped by meeting a new partner, who despite the 2004 relapse, agreed to marry him in 2006. “She has been a foundation for much of what I have achieved.”
“When I was down, out and homeless I was kicked about from pillar-to-post, demonised and set aside as an example of a wasted life. I wanted to see what happened to other people and how the government was set-up to help people in similar circumstances.” Graham’s experiences were disheartening.
But a move to national drug charity Addaction as their Financial Inclusion Officer brought Graham face to face with people with similar issues that he had dealt with. “One of the unique selling points about Clean Slate came from my time there. When Addaction service users came to see their caseworkers, they came with money problems galore, most in some sort of crisis. All I was able to do was patch them up and send them on their way.
“So that’s why I set up Clean Slate. with a clear mission – “to help, enable and support vulnerable people regain control of their finances”. It’s still the same but our principal area of expertise is dealing with those recovering from drug and alcohol addiction. As a recovering alcoholic myself, I’ve travelled the journey and believe me it provides an advantage when I am able to recognise the difficulties people in recovery face.
“Our service looks to provide advice on benefits (including the impending introduction of Universal Credit), debt, avoiding extortionate lenders, fuel poverty, savings, insurance, pensions and perhaps most important of all – budgeting. One of our key strategies is to look at the complete picture – if we are looking at someone’s debt issues, we might as well look at their other financial topics as well. We like to think we provide skills for the future to avoid similar difficult situations arising again.
“But lately we’ve had a slight change of direction into training, led by lack of funding for our best work, dealing One-2-One with vulnerable people, especially those struggling with drug and alcohol issues, to get back on track with their money.
“We find it difficult to attract money to do that work. Funders want ‘bums on seats’ and numbers – payment by results. The problem we have is how do you measure increased confidence, self-belief, self-value and wellbeing in a number? I see it in their faces and when they talk about their hopes for the future but that’s not enough for the people with the money.”Tagged in: financial inclusion, loan sharks, payday lenders
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